With prices of pulses having increased sharply in less than a year, it’s not only household kitchen budgets that have been disrupted.Jayashree Bhosale&Madhvi Sally | ET Bureau | October 26, 2015, 18:30 IST

With prices of pulses having increased sharply in less than a year, it’s not only household kitchen budgets that have been disrupted.PUNE/NEW DELHI: With prices of pulses having increased sharply in less than a year, it’s not only household kitchen budgets that have been disrupted. As Diwali approaches, manufacturers of savouries and sweets, many of which are made with dals, are contemplating their options in dealing with higher prices.

Consumers will likely end up paying more for sweets and namkeen or getting less for the same price. Products made by small units could contain Canadian yellow peas instead of the traditional chana or moong dals.

Domestic production of pulses has been affected by two consecutive deficient monsoons, sending prices higher. During the past year, the price of chana dal has shot up 71%, moong dal 32% and moth (mataki) 41%.

“The volatility in pulses prices this year has impacted the business,” said AK Tyagi, senior vice-president at Haldiram, a manufacturer of ethnic snack foods (namkeen) and traditional Indian sweets. The company normally buys pulses such as chana dal, moong dal and moth to meet requirements for six months.

“We will have to adopt a multiple strategy. We might have to increase the prices, store more for the year and look at imported pulses,” said Tyagi, who expects prices to stabilise in the next few days after steps taken by the government, including freeing up hoarded stocks, and the arrival of imported pulses. Keyur Virani, director of Rajkot-based Balaji Wafers, said it was considering reducing the quantity in packets. “We can’t increase the price of the Rs 5, Rs 10 and Rs 20 packs. What we can do is reduce the quantity of the pulses,” he said, adding that the company will take a decision on the matter by December.

Virani said Balaji currently sells 25 grams of moong dal mixture for Rs 5 compared with 45 grams two years ago at this price. Balaji purchases over 1,000 tonnes of pulses in a month, of which 60% is moong dal.

With Diwali around the cor ner, some sweet manufacturers are trying to keep customers happy by not increasing the prices.

“As of now, we are trying to absorb the rise in prices,” said SR Chitale, a partner at Chitale Bandhu Mithaiwale, a Pune-based snack manufacturer. “After Diwali, we may have to pass on the effect of rise in prices of raw materials to the consumers if prices do not cool down.”

While the bigger sweet and snack makers are building up inventory or considering increasing prices, small-scale manufacturers have boosted the use of yellow peas, imported mainly from Canada, Russia and Ukraine, in a bid to control costs.

Yellow peas have been blend-ed with tur dal in sambar and dal preparations in hotels, while in the case of sweets and namkeen, they have been mixed with chana and moong dals. At about Rs 25 a kg, the cost of yellow peas is at least half of chana dal, one third of moth, one fourth of moong dal and one fifth of tur dal.

“Those who were using yellow peas to replace chana dal on a smaller scale have increased their use of yellow peas even up to 80%,” said a dal miller and manufacturer of besan (chana flour) from Maharashtra.

Maize is also a replacement for pulses such as chana dal in sweets and namkeen, especially when prices go up, a trade expert and analyst from Indore said.